Disease economics: COPD and Pneumonia

Following on from my last post on asthma, here are the economic details for the other two big respiratory disease expense categories: COPD and Pneumonia.


To recap:

  • Asthma: $16 B/yr; clinical condition code #128
  • Pneumonia: $12 B/yr; clinical condition code #122
  • COPD: $11 B/yr; clinical condition code #127
  • Other upper respiratory infections: $8 B/yr; clinical condition code #126
  • Other upper respiratory disease: $11 B/yr; clinical condition code #134
  • Other lower respiratory disease: $10 B/yr; clinical condition code #133

This post focuses on COPD and Pneumonia. (Scroll to the bottom footnotes for the explanation of the color coding, and for details of where the numbers come from and what population they cover).

Pneumonia and COPD: Expenses & Cost per event


Observations on COPD & Pneumonia economics

  • Unsurprisingly given the nature of these two clinical conditions, the economic fingerprints of pneumonia and COPD are quite different.
  • The majority of the expenditure for pneumonia falls into the In-patient category.
  • In contrast, for COPD, drug expenditures make up roughly half the expenditures, followed by a substantial In-patient component and also a sizable office visit component.
  • For both conditions, once in the hospital the cost/event for in-patient treatment is significant.

Opportunities in COPD and Pneumonia

For pneumonia, it seems like preventing the disease from developing sufficiently far to require in-patient treatment might be interesting. Perhaps the approach being pioneered by companies like Stethocloud might be relevant to this goal?

For COPD, which is largely a disease that occurs as a result of activities like smoking, there are a number of companies that over the last decade have been attempting to develop less invasive versions of the procedures that get performed in hospitals on COPD patients, and these initiatives are clearly focused squarely on reducing the cost/event for in-patient procedures for these patients.

If you have other ideas, or want to know more about the details behind the numbers, let me know.

Data footnotes and References

  1. Data comes from AHRQ (details discussed in prior posts here and here). The numbers above represent an estimate of total expenditures (2010) in the USA for the different categories of disease (excluding the institutionalized and the military), not including any secondary costs like lost productivity.
  2. An Event is a “stay”/”visit” typically for clinician encounters, and a “purchase” for a drug.
  3. There are some unexplained discrepancies in the magnitude of “visits”. And all these numbers differ a bit from other sources when it comes to patient numbers and disease incidence. The strengths of this data set is that it includes expenses. I recommend some caution regarding absolute numbers and would not rely on them to better than a factor of 2. The Relative numbers are probably reasonable.
  4. Coding comes from patient self reporting, so not super accurate.
  5. Color coding of the expense categories is below. Note: The size of the pie chart elements is NOT meaningful. Just the colors.
Expense color coding

Expense color coding

Initial Image credits: 
Wikimedia Commons


  1. Chris Wigley says:

    Pneumonia is an acute illness which is frequently an exacerbation of the chronic disease COPD. This complicates a simple analysis such as shown here.

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